Payne Medical Labs is evaluating two new products to introduce into the marketplace. Product 1 (a new form of plaster cast) is relatively low in risk for this business and will carry a 10 percent discount rate. Product 2 (a knee joint support brace) has a less predictable outcome and will require a higher discount rate of 15 percent. Either investment will require an initial capital outlay of $90,000. The inflows from projected business over the next five years are given below. Which product should be selected, using net present value analysis?

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Year $25,000 30,000 38,000 31,000 19,000 Product 2 $16,000 22,000 34,000 29,000 70,000 2 3 4